The Canadian dollar continues to move higher on Tuesday, after starting the week with slight gains. Currently, USD/CAD is trading at 1.2644, down 0.24% on the day. On the release front, both Canada and the U.S. release Trade Balance, and the U.S. will also publish ISM Non-Manufacturing PMI. On Wednesday, the Bank of Canada will set the benchmark rate and the U.S. releases ADP Nonfarm Employment Change.
The Bank of Canada is expected to maintain interest rates at 1.00% on Wednesday, but may have to consider another rate hike early in 2018, if Friday’s sparkling numbers Friday continue. Canadian employment change soared to 79,500, crushing the estimate of 10,200. This marked 12 straight months of job gains and helped drive the unemployment rate down to 5.9%. As well, September GDP rebounded with a gain of 0.2%, edging above the estimate of 0.1%. The impressive numbers boosted the Canadian dollar by some 1.6% on Friday, its strongest one-day gain in 2017. If the BoC rate statement sounds optimistic about the Canadian economy, the Canadian dollar could continue to rally.
The U.S. Senate passed a tax reform bill on the weekend, but the vote was a razor-thin 51-49. The vote went along party lines, with one Republican voting against the bill. Now that that the House and the Senate have passed tax bills, a conference committee will try and hammer out a uniform bill that can be sent to President Donald Trump and signed into law. There are some differences in the two bills, notably individual tax rates, the alternative minimum tax, mortgage interest deductions and the estate tax. The Senate and House will have to work out their differences quickly, as the new “merged” bill will have to pass through in both houses. If the bill does become law, it will mark the first major tax reform in the U.S. in 30 years, and could boost the U.S. dollar against the euro and other major currencies.
Tuesday (Dec. 5)
Wednesday (Dec. 6)
*All release times are GMT
*Key events are in bold
USD/CAD for Tuesday, Dec. 5, 2017
USD/CAD, Dec. 5 at 7:50 EDT
Open: 1.2674 High: 1.2684 Low: 1.2632 Close: 1.2644
USD/CAD was flat in the Asian session and has edged lower in European trade
Further levels in both directions:
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in the Tuesday session. Currently, long positions have a majority (58%), indicative of trader bias towards USD/CAD reversing directions and moving lower.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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